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International Freight Transport Multimodal Development in Developing Countries

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International Freight Transport Multimodal Development in Developing Countries INTERNATIONAL FREIGHT TRANSPORT MULTIMODAL DEVELOPMENT IN DEVELOPING COUNTRIES: THE CASE OF BANGLADESH by DEWAN MOHAMMAD ZAHURUL ISLAM A thesis submitted to the University of Plymouth in partial fulfilment for the degree of DOCTOR OF PHILOSOPHY International Shipping and Logistics Group Plymouth Business School 2005 ABSTRACT INTERNATIONAL FREIGHT TRANSPORT MULTIMODAL DEVELOPMENT IN DEVELOPING COUNTRIES: THE CASE OF BANGLADESH By: DEWAN MOHAMMAD 2AHURUL ISLAM An efficient transport system is essential for an efficient supply chain to facilitate international trade. To utilise all cheaper resources, such as labour in Bangladesh, companies receive supplies from one coxintry (e.g. in Hong Kong), produce the products in another country, and sell them in other countries (e.g. European countries). Thus the production and consumption has turned into a global activity with transport filling the gaps among them. To perform the transport function a carrier may require the use of more than one mode, the so-called multimodal transport. Multimodal transport, an integrated systems approach, can be defined as the most cost- and time-effective way of moving goods from shipper to consignee by at least two different modes of transport under a single contract. The system has been operating for more than three decades in developed countries, but in developing countries the transport system is still operating in a conventional fragmented way where modal integration has not been achieved. In particular the inland part of the international transport haul has appeared as a barrier to establishing an integrated multimodal transport system. In general, the transport systems in developing countries have failed to contribute to effective international supply chain. Little research has been conducted in this field in developing countries, including Bangladesh. The present research attempts to fill this gap through a triangulation technique; an in-depth literature review of international freight transport of developing countries particularly Bangladesh and developed countries; two rounds of Delphi study among a Bangladeshi panel; and a quantitative study based on a survey. The research hypothesises that Uhe extent to which a fragmented freight transport system can be transformed into an integrated multimodal transport system depends on the present state of the country'. The validity of the hypothesis was established through triangulation. The research also found that there has been a significant freight transport multimodal development in Bangladesh but it has not been perceived by the stakeholders. Ill Chapter Heading Page and Section No. Copyright statement i Tile page ii Abstract lii List of contents iv List of tables x List of figures xii Acknowledgements xiii Author's declaration and word count xiv List of Abbreviations xv 1 INTRODUCTION TO THE RESEARCH 1-13 1.1 RESEARCH BACKGROUND 1 1.2 MULTIMODAL TRANSPORT RESEARCH 5 1.3 AIM OF THE RESEARCH 7 1.4 PROBLEMS OF DATA COLLECTION 8 1.5 RESEARCH METHODOLOGY 9 1.6 STRUCTURE OF THE RESEARCH 9 1.7 OUTCOME OF THE RESEARCH 13 2 MULTIMODAL TRANSPORT CONCEPTS AND PRACTICE 14-26 2.1 INTRODUCTION 14 2.2 CONTAINERISATION AND MULIMODALISM 15 2.3 MULTIMODALISM, INERMODALISM AND COMBINED 16 TRANSPORT 2.4 LIMITATIONS OF MULTIMODALISM 20 2.5 CARGO HANDLING AND TRANSFER 21 2.6 CHANGING INTO A MULTIMODAL TRANSPORT SYSTEMS 23 2.6.1 Spatial Change 24 2.6.2 Technological Change 25 2.6.3 Organisational Change 25 2.7 SUMMARY 26 3 INTERNATIONAL FREIGHT TRANSPORT SYSTEMS IN 27-59 DEVELOPING COUNTRIES 3.1 INTRODUCTION 27 3.2 FREIGHT TRANSPORT SYSTEMS IN DEVELOPING 28 COUNTRIES 3.2.1 Present Freight Transport System 28 3.2.2 Freight Transport Multimodal Development 29 3.3 GLOBALISATION AND COMPETITION 30 3.3.1 Globalisation versus Regionalisation 31 3.3.2 Local Entrepreneurial Skill 32 3.3.3 Political Influences 33 3.3.4 Trade Barriers 34 3.4 THE ROLE OF GOVERNMENT 35 3.4.1 Deregulation and Privatisation 36 3.4.2 Deregulation in the Transport Sector 38 3.4.3 Policy Formation 39 3.5 CHANGES IN TECHNOLOGY AND METHODOLOGY 40 IV Chapter Heading Page and Section No. 3.5.1 Inland Terminal and Clearance Depots 41 3.5.2 Technology Transfer 41 3.5.3 Information Technology 42 3.6 STANDARDISATION 44 3.6.1 Cargo Unitisation 44 3.6.2 Flow of Information 46 3.7 LOGISTICS CONCEPTS AND PRACTICE 48 3.7.1 Importance of Logistics Service 50 3.7.2 Contrasting Logistics Concepts 52 3.7.3 Trust and Commitment 53 3.7.4 Impact of Foreign Service Providers 54 3.8 CHANGES IN INLAND TRANSPORT SYSTEMS 56 3.9 SUMN4ARY' 57 4 INLAND TRANSPORT SYSTEMS IN BANGLADESH FOR 60-97 OVERSEAS TRADE 4.1 INTRODUCTION 60 4.2 EC0N0N4Y AND TRADE OF BANGLADESH 61 4.2.1 Economic Policy 61 4.2.2 Benefits of Liberal Economic Policy 63 4.2.3 Overview of International Trade 64 4.2.4 Trade and Transport 70 4.3 DEMAND FOR OVERSEAS FREIGHT TRANSPORT 72 4.4 THE INLAND TRANSPORT SYSTEMS FOR OVERSEAS 74 TRADE 4.4.1 Road Transport 77 4.4.2 Rail Transport 79 4.4.3 Inland Water Transport 82 4.5 REVIEW OF SEAPORTS 83 4.5.1 Mongla Port 83 4.5.2 Chittagong Port 84 4.6 OVERVIEW OF INLAND TERMINALS 88 4.7 LOGISTICS PRACTICE 91 4.8 PUBLIC VERSUS PRIVATE ROLE 93 4.9 SUMMARY 95 5 THE TRANSPORT SYSTEMS OF BANGLADESH FOR 98 REGIONAL TRADE -126 5.1 INTRODUCTION 98 5.2 TRADE WITH SAARC 99 5.3 TRADE WITH INDIA 99 5.4 TRADE WITH NEPAL AND BHUTAN 105 5.5 TRADE WITH MYANMAR 106 5.6 INFORMAL TRADE WITH NEIGHBOURING COUNTRIES 107 5.7 CHANGES IN DEMAND FOR REGIONAL FREIGHT 109 TRANSPORT 5.8 TRANSPORT OPTIONS FOR TRADE WITH SAGQ 110 COUNTRIES 5.8.1 Rail versus Road Option 111 5.8.2 Inland Waterways Transport Options 116 Chapter Heading Page and Section No. 5.9 TRANSPORT AND LOGISTICS RELATED CONSTRAINTS 119 5.10 FACILITIES AT BORDER CROSSINGS 121 5.11 SUMMARY 123 6 MULTIMODAL FREIGHT TRANSPORT IN NORTH 127 AMERICA AND EUROPE -155 6.1 INTRODUCTION 127 6.2 LOGISTICS MANAGEMENT 127 6.2.1 Focus of Logistics Management 127 6.2.2 Third Party Logistics 130 6.3 MULTIMODAL TRANSPORT OPTIONS 132 6.3.1 Market and Competition 132 6.3,2 Road-Sea Multimodal Transport 135 6.3.3 Road-Water Multimodal Transport 137 6.3.4 Road-Rail-Maritime Multimodal Transport 139 6.4 USER'S ROLE IN MULTIMODAL TRANSPORT 142 6.4.1 Change in Consignment 142 6.4.2 Change in Supply Chain Control 143 6.5 GOVERNMENT ROLE 144 6.5.1 Creation of Service Environment 144 6.5.Li Deregulation in Europe 146 6.5. L2 Deregulation in the U.S 147 6.5.2 Government Role in Infi-astructure Development 149 6.5.3 Public-Private Partnership 150 6.5.4 Government as an Accelerator 151 6.6 IMPLICATIONS FOR DEVELOPING COUNTRIES 152 7 CONCEPTUAL MODEL DEVELOPMENT 156 -179 7.1 INTRODUCTION 156 7.2 CONCEPTUAL MODEL DEVELOPMENT 158 7.2.1 Introduction 158 7.2.2 International Trade Barriers 159 7.2.3 Multimodal Freight Transport Systems as Removers of Trade 161 Barriers 7.2.4 Present Freight Transport Systems in Bangladesh 162 7.2.5 Mutimodal Transport Systems in Developing Countries 163 7.2.6 Freight Transport Multimodal Development in Bangladesh 164 7.3 THE HYPOTHESIS AND ASSUMPTIONS 171 7.3.1 The Hypothesis 171 7.3.2 Assumption of Dimensions, Sub-Dimensions and Statements 172 8 EMPIRICAL RESEARCH METHOD 180 215 8.1 INTRODUCTION 180 8.2 RESEARCH DESIGN AND TYPOLOGY 180 8.2.1 Research Design According to Objective 183 8.2.2 Research Design According to the Number of Responses 183 8.2.3 Research Design According to Data Required 184 8,2.3.1 Combination and Triangulation 186 8.2.3.2 Quantitative Research Merits and Demerits 187 VI Chapter Heading Page and Section No. 8.2.3.3 Qualitative Research Merits and Demerits 189 8.2.3.4 Recording, Managing and Analytical Approaches 190 8.3 QUALITATIVE ANALYSIS TECHNIQUES 191 8.3.1 Depth Interviews 191 8.3.2 Group Discussion 193 8.3.3 Delphi Technique 196 8.3.4 Justification of Using Delphi Study 199 8.3.4 J Avoiding Difficulties of Group Discussion and Depth Interviews 200 8.3.4.2 Lack of empirical data 201 8.4 CHARACTERISTICS OF THE DELPHI TECHNIQUE 201 8.4 A. 1 Expert Panel Members 201 8.4.1.2 Feedback 201 8.4.1.3 Use of a Series of Questionnaires 202 8.4.1.4 Anonymity of Response 203 8.4.2 Use of the Delphi Technique 204 8.4.3 Selection of the Delphi Panel 207 8.4.4 Convergence of Consensus in Delphi Study 208 8.5 SELECTING DATA COLLECTION METHODOLOGY 209 8.5.1 Primary Data Collection Methods 210 8.5.2 Personal Interview or Survey 211 8.5.3 Telephone Interview or Survey 212 8.5.4 Mail Survey 213 8.5.5 Online Survey 213 8.5.6 Combined Survey Methods 214 8.5.7 Interviews versus Surveys 214 8.6 SUMMARY 215 9 THE EMPIRICAL STUDY - TWO ROUNDS OF DELPHI 216 -235 9.1 INTRODUCTION 216 9.2 DELPHI QUESTIONNAIRE DESIGN AND ADMINISTRATION 217 9.3 DELPHI STUDY IN BANGLADESH 218 9.3.1 Formulation of Questionnaire for First Round 218 9.3.2 Panel and Process of the Delphi Study 220 9.3.3 A Comparison of Two Rounds of Delphi 222 9.3.4 Result of the First Round Delphi Survey 222 9.4 SECOND ROUND DELPHI 224 9.5 RESULTS OF THE DELPHI STUDY IN BANGLADESH 225 9.5.1 Present State of Freight Competition 225 9.5.1.1 The Freight Transport Market 226 9.5.1.2 Present Competitive Regime 228 9.5.
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